Palantir Stock Under $30: Should You Buy?

AI stocks like Palantir (NYSE: PLTR) are popular. AI powers Gotham and Foundry for years. AI investors now view Palantir differently after its recent platform rollout. Since early February's mid-$20s per share, the stock's advances have stalled. Should investors buy under $30 per share or does the stock price behavior indicate the rise is over? Let's investigate.

Why investors may not buy today Investors may not buy today because they think the stock's price has outpaced its valuation. The company's stock doubled since late 2022. AI optimism may have caused this surge, raising the stock's price.

Thus, it appears pricey in multiple ways. A 255 P/E ratio may not scare investors because Palantir has only made a profit for five quarters. However, its forward P/E ratio is 70 and its P/S ratio is 24. At such prices, investors may think Palantir is priced for perfection.

Palantir has become a meme stock among investors, increasing the risk that its stock price would deviate from its fundamentals. Management may have indirectly responded to the stock's meme-like behavior. CEO Alex Karp recently slammed short sellers, a curious reaction given that he could utilize recent profits to buy shares.

Another indicator suggests Palantir underperforms. In 2023, its $2.2 billion revenue climbed 17%, below Karp's early 2022 prediction of 30%. In 2022, Palantir lost $371 million, but strong quarters helped it earn $217 million.

Why Palantir stock may survive Investors may have more than the company's recent prosperity to like the stock. The stock sells at just about 50% below its all-time high despite the 16-month rise. Additionally, anticipation regarding its current product introduction may explain the stock price rise beyond memes. Palantir introduced its generative AI-driven AI Platform last year. AIP is promoted through "bootcamps"—intensive product demos show users its capabilities.

Palantir has completed 560 bootcamps as of its early February earnings report, and client feedback was positive. The company said one attendee thought their organization had "100 use cases" for AIP, while another said they achieved more in one day than a hyperscaler did in four months.

We shouldn't be surprised that Palantir's customer count climbed 35% in a year with such productivity increases. A forecasted 19% revenue boost for 2024 may not meet that growth. U.S. commercial revenue is expected to rise at least 40% throughout that time. Thus, AIP may become a green shoot that boosts Palantir stock.

Should I buy Palantir stock below $30? Considering present conditions, how you buy Palantir stock is more important than if you buy. Current conditions suggest investors should add shares slowly, if at all. The stock may fall due to its valuation and short sellers.

AIP offers customers staggering productivity gains. The U.S. commercial industry is projected to see significant revenue growth. Palantir can extend its bull run from current levels if it satisfies such high expectations.

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